CCA Chairman Leads Trade Mission to Madagascar, Mozambique and Mauritius
May 10-19, 2015
From May 10-19, CCA led a delegation of 14 people from 10 different companies on a trade mission to Madagascar, Mozambique and Mauritius. During the 10 day program of ministerial meetings, site visits and networking events, delegates explored current investment opportunities in the three countries and met with local business leaders to discuss potential partnerships in a variety of sectors, including energy, agribusiness, ICT and infrastructure.
Participating companies included Boulle Mining Group, Caterpillar, Development Finance International Inc., EAI Information Systems, Hart International, MacLean Power Systems, SkyPower, Symbion Power, TUSKON U.S., and Vital Capital. CCA’s Chairman, Paul Hinks, along with CCA staff members Mia Warner and Morayor Essieh led the delegation.
A Welcome Dinner and Reception with H.E. François Marie Maurice Gervais Rakotoarimanana, minister of finance and budget; H.E. General Herilanto Raveloharison, minister of economy and planning; H.E. Narson Rafidimanana, minister of industry and private sector development kicked off the visit to Madagascar. The event opened with remarks from U.S. Ambassador Robert Yamate; H.E. Minister Rakotoarimanana; Velotiana Raobelina, hargé d'Affaires for the Embassy of Madagascar to the U.S. Mr. Hinks also thanked those in attendance for the warm welcome and highlighted the excitement among U.S. companies about the various investment opportunities available in Madagascar, including prospects in the country’s mining and energy sectors.
CCA’s delegation also met with H.E. Hery Rajaonarimampianina, president of the Republic of Madagascar, along with government members including H.E. Béatrice Attalah, minister of foreign affairs. During the meeting, the delegates highlighted their sectors of interest for investment, and H.E. President Rajaonarimampianina expressed his support for strengthening trade and investment between the U.S. and Madagascar and emphasized the need for support for the African Growth and Opportunity Act (AGOA). Following the presidential meeting, Ambassador Yamate hosted a Networking reception at his residence, allowing the delegation to make connections with key government officials and potential local business partners. CCA’s delegation also met with the ministers of energy and hydrocarbons; mining and oil; agriculture; trade and consumption; and tourism, transport and meteorology. On the last day in Madagascar, the Economic Development Board of Madagascar (EDBM) and American Chamber of Commerce Madagascar hosted a lively networking breakfast for the delegation, which included local private sector leaders.
In Mozambique, The delegation was welcomed by H.E. Amelia Matos Sumbana, ambassador for the Republic of Mozambique to the U.S. and Ms. Ana Maria Alberto, commercial counselor for the Embassy of Republic of Mozambique in the U.S. The delegates engaged in various meetings and events led by ministers and business representatives. Private sector-led sessions included a luncheon hosted by Bechtel Limited, a breakfast briefing hosted by Standard Bank and a lunch briefing hosted by Anadarko. The delegation also participated in a networking session and reception with the American Chamber of Commerce Mozambique, The Confederation of Economic Associations of Mozambique (CTA) and the Mozambique Investment Promotion Center (CPI).
U.S. Ambassador Douglas M. Griffiths, along with Jane Kitson, commercial counselor for the U.S. Embassy in Mozambique, and her team led an in-country briefing that outlined Mozambique’s economic outlook and its key areas for foreign investment. This was followed by a networking reception at the Ambassador’s residence, which offered delegates an opportunity to mingle with business representatives to further discuss opportunities for investment and partnerships. Throughout their time in Mozambique, the delegation had meetings with the ministers of foreign affairs; mineral resources and energy; transport and communications; agriculture and food security; industry and trade; and technology and vocational training. There was also a site visit to an industrial park where the delegates met with Midal Cables, Duys Mozambique and Cimento Nacional Lda. The Mozambique portion of the trade mission concluded with a cultural tour in Maputo organized by CPI and an agribusiness site visit organized by the Ministry of Agriculture.
In Mauritius, the Ministry of Foreign Affairs, Regional Integration and International Trade welcomed the delegation with a breakfast meeting at the Hennessy Hotel, which is located in one of the country’s Cybercities called Ebene Cybercity – a contemporary development that features world-class facilities for businesses through the use of information technology. The event featured opening remarks from Hon. Etienne Sinatambou, minister of foreign affairs, as well as Mr. Hinks and U.S. Ambassador Shari Villarosa, who noted that the CCA delegation is the first American trade mission to visit Mauritius in 15 years. During the breakfast, which included key Mauritian business leaders and government officials, participants engaged in discussions about business opportunities in key growth sectors including ICT, agribusiness, finance and energy.
The delegation also had the opportunity to meet with: Hon. Sir Anerood Jugnauth, prime minister of the Republic of Mauritius; Hon. Ivan Leslie Collendavelloo, vice prime minister and minister of energy and public utilities; in addition to the ministers of public infrastructure and land transport and officials of the ministry of technology and innovation.
While in Mauritius, the delegation attended a lunch briefing hosted by PricewaterhouseCoopers Ltd. (PwC) and Standard Bank. The trade mission delegates also participated in a site visit to Medine Business Park located in the west of the country. The park provides high quality facilities for businesses and education. During the site visit, the delegates also had the opportunity to visit Bambous Solar Park, Mauritius’ first solar power plant. Up to 15.2 MW of solar power will be produced at the 34-hactare site and distributed to the local grid. The power plant is operated by SARAKO, an energy company founded in 2013 with the aim to provide solar energy in Mauritius and the rest of Southern Africa.
Following the site visit, the Board of Investment hosted a luncheon for the delegates as well as a presentation on investment opportunities in Mauritius. The presentation included information on the country’s economic outlook with emphasis on government initiatives that support developments in ICT, energy and infrastructure. The trade mission program concluded with a networking event with the private sector, organized by the Board of Investment in collaboration with Enterprise Mauritius and Mauritius Chamber of Commerce and Industry.
CCA would like to thank the delegation and our partners for their part in helping make the mission a grand success; we would particularly like to thank our sponsors, Symbion, PWC, Standard Bank, and Bechtel.
Investment Opportunities in Mozambique Working Group
April 10, 2015
On Friday, April 10, The Corporate Council on Africa was honored to host Her Excellency Amélia Matos Sumbana, Ambassador of Mozambique for our working group on investment opportunities in Mozambique. CCA will feature a trade mission to Madagascar, Mozambique, and Mauritius in May, and this working group event served as a great sneak peak. The second featured speaker Mr. Mark Hanley, who is director of government relations for Anadarko Petroleum Corporation, spoke on the success of his firm in the country.
H.E. Amélia Matos Sumbana began by outlining the natural resources that the country is blessed to possess. Mozambique contains a large coastline which connects the country to other parts of the world and the Indian Ocean. Mozambique has several ports including Beira, Naccala, and new ports are being built in the north. It is a country that has experienced over a decade of stability, and this will be unchanged in the future. They are expecting growth on an upwards of 8% in the coming years. Her Excellency discussed new changes in the cabinet including the Ministry of Agriculture’s split into the Ministry of Agriculture and Food Security and the Ministry of Land, Environment, and Rural Development. The Ministry of Finance and Ministry of Planning and Development has merged into the Ministry of Finance and Economy. The Ministries of Mineral Resources and Energy have merged into one Ministry as well.
2014 was indeed a year of transformation for the country. With the new government, the country is pivoting its focus on Agriculture, Energy, and infrastructure. They are waiting for the backbone transmission project to be financed and spread. Her Excellency emphasized the importance of infrastructure, for transport and for energy. The business environment is conducive for investment, with related laws to guide FDI and the development of legal frameworks. The country offers fiscal incentives to investors. Her Excellency stated that Mozambique wants more American participation, especially in the areas of infrastructure and developing human capacity.
Mr. Hanley followed Her Excellency’s remarks by discussing the progress of Anadarko’s investment in Mozambique. Anadarko began its engagement with the country in the early 2000s when they were awarded 6 million acres of off shore and onshore concessions. What they’ve found in their studies and wells is that Mozambique contains a huge amount of hydrocarbons in the Rovuma basin where they operate. Currently, the LNG development is done, and the goal is to complete that stage production next year. Ultimately, they will produce their first cargo for export in 2019. Mr. Hanley discussed how Anadarko has worked with the government to create the legal and contractual framework necessary to their activities. Mozambique passed a law last year which marks a progress in the oil sector. He concluded by stating it is an exciting time for investment.
In the Q&A there were many questions raised regarding infrastructure and SMEs. Regarding SMEs, Her Excellency explained that the industry is still developing however it is very important to the government’s objectives of employment and transferring know-how. She noted that the definition of SMEs in the U.S. can mean very big business in the country. Mozambique has a specific branch in the government devoted to serving SMEs along with an Institute for entrepreneurs. A gentleman asked what plans for infrastructure the government has. Her Excellency answered by emphasizing the concern of infrastructure to Mozambique. She stated there are not enough railways, roads or ports and even the existing transport infrastructure needs to be further developed. They are seeking to address the issues of floods by developing water management and infrastructure to contain it. A woman asked on the state of access available to shareholder farmers in the rural areas to capital. Her Excellency responded by stating that Mozambique has a number of private banks, and the banks are working on making lending access available to local farmers. Last year the government instituted a program of 7 billion that will service local and rural populations.
This program will serve as a bank, lending to locals and providing access to capital.
Another question raised asked on incentives for foreign investors to bring manufacturing and jobs in the solar industry. Her Excellency responded by affirming the importance of solar energy and knowledge transfer. She stated that there exists incentives and laws for the development renewables, especially in hydropower and rural electrification. Another question asked on the frameworks for supporting young professionals in Mozambique. Her Excellency responded by stating the Ministry of Management and Technology works with the Universities for training the young professionals and they try to provide support for entrepreneurs to develop their projects. The last question asked on infrastructure, and specifically the Nacala corridor and developing a Mozambican engineer corps. Her Excellency responded stating that Mozambique worked with MCC and the grant helped develop dams and water supply in the areas of agriculture. The World Bank supported Mozambique’s flood response. The ING authority in Mozambique was created to respond to floods and natural disasters. As far as partnership, PPPs are being coordinated with EDM. Several private firms like SASOL and MozGas are transferring natural gas to power.
Power & Trade Working Group: Partnership Opportunities in East Africa
March 25, 2015
On March 25, CCA’s Power and Trade Working Group hosted Dr. Gachao Kiuna, CEO of TransCentury at the Capital Club in Nairobi, Kenya to discuss partnership opportunities in East Africa. This event marked the first time that CCA has hosted a working group on the continent.
The event began with opening remarks from Stephen Hayes, president and CEO, CCA, who gave a warm welcome to attendees and emphasized the importance of hosting the meeting in Kenya. Mr. Hayes also announced that CCA will officially open its East Africa office in May, and the organization’s East Africa Director, Sonia Mfasoni, will operate out of the Kenya Private Sector Alliance (KEPSA) headquarters in Nairobi.
Next, Dr. Kiuna began his presentation by highlighting the investment potential in East Africa’s infrastructure sector. With increased government initiatives to develop the power sector through power plant development and expansion of distribution networks, there are many opportunities for firms interested in doing business in the region. Additionally, road construction and rehabilitation is being funded through government budgets, loans from development banks and funds from partners – allowing for more public-private partnership (PPP) opportunities.
Dr. Kiuna continued by discussing how TransCentury has worked to capture these opportunities. The company is developing high return infrastructure projects in partnerships with key technical partners and has a strong pipeline of projects in excess of $500 million of equity. It has prioritized focus on power and transportation projects and will add value by originating, building and operating these infrastructure projects along with technical partners and governments. He concluded his remarks by outlining opportunities for partnerships between TransCentury and interested investors before taking questions from the audience. The event ended with closing remarks from Mr. Kiprono Kittony, National Chairman of the Kenya National Chamber of Commerce and Industry.
Energy Working Group: A Roundtable on MCC's Procurement Policies
February 18, 2015
CCA’s Energy Working Group was honored to host a roundtable discussion on the procurement policies of the Millennium Challenge Corporation (MCC). The meeting featured four representatives of MCC, including Mr. Prabhat Garg, the practice lead and senior director of program procurements, and Mr. Garg’s fellow MCC representatives who work on African compacts. The highly interactive session provided an opportunity for companies to learn more about MCC’s procurement and grant opportunities and provide feedback to the current process.
Mr. Garg highlighted that most of the upcoming and new compacts are involved with the energy sector and spent time discussing each of the upcoming opportunities. Out of the compacts, there are both procurement and grant opportunities. With procurements, the tenders are much more structured and explicit. With grants, the emphasis is on innovative solutions and product sustainability. For instance, the grants that will be announced in early March in Zambia will range from US$3,000 to US$2 million. More information on those opportunities can be found on the Millennium Challenge Account (MCA) Zambia website. The Niger compact is slated to be signed in 2016, and Benin, Morocco, and Libya compacts will be signed this year.
Mr. Garg asked for feedback from the attendees, particularly on the issues of lifecycle costs, quality cost-based selection, alternative methodology, and value-add incentives. He said that placing more emphasis on certain requirements and incorporating them into the documents can make the process more ambiguous, so he asked for suggestions of how to do this in the RFPs and bid documents. These issues were reiterated in the questions raised by participants. Several people suggested considering the lifecycle costs of supply chain products, in addition to the post testing of products on the ground and immediate testing after installation. In judging the quality of the suppliers, MCC has proposed using the formats of the World Bank and UN, along with other agencies. If contractors are eligible on the World Bank list, then they would be so in the upcoming MCC compacts. MCC does not currently consider regional compacts, but it is a future possibility. Some members asked for more advanced warning when RFPs for upcoming compacts are going to be released. There is also an issue with the highly prescriptive backgrounds on personnel, and attendees suggested considering experience as a requirement over academic degrees.
A point raised by one participant was the tax structures in which bidding companies operate. He suggested that MCC consider taxes in the prices offered by bidding companies to give U.S. firms a better chance to compete in the process, since corporate tax rates are much lower in most other countries MCC works with. When asked what U.S. firms can do to stand out in their proposals, MCC representatives suggested stacking a proposal with key staff quality. Because fixed pricing is an issue of risk for many companies, it is important to consider the highest quality for the lowest price in the proposals.
Power Working Group: Power Project Opportunities in MCCâ€™s Benin Compact
February 10, 2015
On Tuesday, February 10th, CCA’s Power Working Group hosted a presentation by the Millennium Challenge Corporation (MCC) on power project opportunities in the new Benin Compact. The meeting featured four representatives of MCC, including Mr. Christopher Broughton, the country team leader for Benin and H.E. Omar Arouna, Ambassador of Benin.
In his introductory remarks, Ambassador Arouna discussed Benin’s power sector, highlighting opportunities and challenges for private sector participation. He noted that the main source of energy in Benin is biomass (namely firewood), and that Benin is considered an entry door to West Africa, and a stable member of ECOWAS, a region holding huge markets for business investment. Benin also experiences domestic power shortages every day, which is why MCC’s compact and its focus on energy is welcomed. Ambassador Arouna concluded his remarks by announcing that the embassy is ready to facilitate access to the energy market with an energy trade mission to Benin in April.
Mr. Christopher Broughton began his presentation by outlining MCC’s business model. He emphasized that countries selected for compacts go through a competitive selection process based on economic freedom, democracy and good governance. Benin was granted a first compact from 2006 to 2011 of $307 million. The first compact improved port tonnage, and focused on institutional support. The institutional support from the first compact brought clarity to the entire sector, a regulator was created, and an IPP framework was developed. This second Benin Compact, from 2016 to 2021, is a 5 year investment program with its own oversight structure in place. MCC, in this new compact, seeks to create an enabling environment for the development of on- and off-grid energy solutions. No final decision has been made on the total amount, however the current impact will be $300 million and is expected to be signed by August 2015. MCC’s feasibility studies are underway for solar, thermal, and hydro. Mr. Broughton also outlined MCC’s request for information (RFI), which seeks to obtain more information from companies on potential projects that would expand access to renewable off-grid electrical power in Benin.
Power Working Group: Project Opportunities with Kenya Electricity Generating Company
January 28, 2015
CCA’s Power Working Group was honored to host a presentation by the Kenya Electricity Generating Company Limited (KenGen). The meeting featured four representatives of the company, including: the Chairman of KenGen, Mr. Joshua Kibet Choge; and the CEO of KenGen, Mr. Albert Mugo.
In his presentation, Mr. Albert Mugo began by highlighting significant statistics on power generation on the continent. There is 129GW of aggregate generation capacity on the continent. Kenya, with a population of 44 million people, consumes electricity at an average of 175kWh/yr. As the East African community (Uganda, Tanzania, Rwanda, Burundi, and Kenya) accelerates its regional economic and infrastructural integration, they will rely on importing power from Kenya to meet the high demand of power and eliminate shortages. There are existing power connections from Kenya to Uganda and Tanzania, and the number of power connections are projected to double and expand into Ethiopia. Mr. Mugo also discussed their power generation distribution model. KenGen and IPPs such as GDC generate from geothermal, wind, hydro, solar, and fossil sources. The transmission of the power that KenGen (KenGen produces 80% of Kenya’s power) and others produce is transported by Kenya Power and KeTraCo (off-takers). The distribution is also done by Kenya Power. Kenya’s energy sector has an institutional framework where policy and dispute resolution is conducted by the MOEP, the KNEB, and the Energy Tribunal. The sector regulator is the Energy Regulatory Commission (ERC).
The Government of Kenya has put in place a strategy to supply 5000MW of power in 40 months. There will be total of 5,538(MW) of new capacity additions, 61% of which are renewable capacity. With the newly installed capacity there will be a tariff progression in which industrial/commercial tariff will see a 37% reduction, and domestic tariff progression will see a 47% reduction. KenGen’s growth strategy sees a target of 3,290MW by 2018. KenGen is seeking to have 50% of installed portfolio to be from geothermal by 2018. Geothermal is a clean, less costly resource to produce in the long-term. It is an especially abundant resource with estimated 10,000MW potential capacity in the Rift Valley/Great Lakes region (of which Kenya is located). Geothermal also provides stable and reliable base-load capacity. KenGen is estimating a cumulative capital expenditure of US$4.4 billion by 2019.
KenGen is eagerly seeking financing from government (Exim Banks), DFIs, and joint ventures/PPP, since these sources are the least expensive. KenGen has several planned projects in the pipeline including four power plants and 80 wells drilling contracts. Mr. Mugo concluded by discussing KenGen’s profit margin and multi-billion dollar assets. He noted the various tax incentives and exemption statuses that are available to investors and partners.
KenGen’s Chairman opened the Q&A by reiterating KenGen’s partnership opportunities. Chairman Mr. Choge believes U.S. firms should understand that the legal framework and the infrastructure is available in Kenya. He advised to not be discouraged by risk, as Africa is the next frontier for investment. He added that the Government of Kenya has appointed knowledgeable ministers who are industry professionals, and are given target strategies within each sector. KenGen is looking for partners. There was a question about the difference in structure between GDC and KenGen tenders. GDC originated out of KenGen and the government’s idea to set up a separate company to explore geothermal. GDC intended to concede power development to private firms, and there are current plans to do so with the rest of its discovered wells. A question was asked on whether KenGen entertains unsolicited procurement (not the tender process). A KenGen representative stated that there is room for unsolicited proposals, however it is a narrow window and largely conditional if the knowledge or ideas are proprietary, or if they can they advance to the stage of public process.
Power Working Group: Power Project and Financing Opportunities
December 16, 2014
The Corporate Council on Africa (CCA) hosted a Power Working Group meeting at the offices of Akin Gump on Power project and financing opportunities. Guest speakers included Mr. James M. Mworia, CEO, of Centum Investment Ltd., and Mr. Michael Philipp, Chairman, of Reykjavik Geothermal. Each of the speakers discussed their experiences doing business on the continent and highlighted their companies’ major projects. During the meeting, CCA also launched their Power and Trade Web Portal, discussing the site’s main features along with ways companies can use the site to feature and search tender opportunities.
In the opening remarks, CCA’s CEO Stephen Hayes discussed the Council’s highlights from 2014 to include hosting 22 special events featuring nine Heads of State and key ministers from every industry during the August African Leaders’ Summit. CCA member Carl Fleming of Akin Gump also welcomed the audience by discussing his experience in the past year as a Power partner and provided some insight on trends in negotiating and advising clients on business in Africa.
One of the trends he gleaned from 2014 was that a larger portion of Power implementation will continue to be done by MCC, which he said is responsible for much of the money being doled out for Power and is looking to invest US$2 billion in the next two years. Fleming highlighted Ghana as a target country for MCC investment and noted that Ghana projects will bring in US$4 billion in private investment over the next three years. Paul Hinks, Chairman of CCA and CEO of Symbion Power, also welcomed the attendees by discussing some of the challenges in developing power projects and outlined how in 2015, CCA’s Power Working Group will showcase projects by companies and promote opportunities for various sectors.
James M. Mworia started the event with his presentation on Centum Investment Company Ltd. Centum has invested across a wide variety of sectors, specifically at the development stage and the onset of projects. He noted that at the development stage, investment appetite is limited because it takes a long time to get projects off the ground. Mworia discussed some significant opportunities with advancing power generation in Africa. He noted the infrastructure deficit as a major challenge for business on the continent, but he said it also presents a unique opportunity for long-term assets.
Mr. Mworia discussed the connections between advancing power on the continent and accelerating the economy, and he illustrated how consumer growth will occur once power generation expands. He mention that for African business to compete, power generation must be increased because it boosts the potential for manufacturing and exporting high value African products. He looked at development across the continent and found that IPP’s have not seen any defaults, and while there have been some renegotiations, there have yet to be any defaults.
Mworia noted that it is critical for projects to be able to reduce the price of power. He highlighted Centum’s investment on a coal power plant and how the cheap power generated from that investment has provided a large supply to the grid. He emphasized the low price of coal makes investment in such a resource beneficial to the general development of industry. To conclude, Mworia emphasized that Africa must be engaged in economic activity beyond the means of basic lighting, and how Centum is interested in projects which carry this vision.
Michael Philipp also presented on a large geothermal project in Ethiopia that was headed by his company Reykjavik Geothermal. The project is very large and is considerably a global endeavor. Challenges such as the need for detail and universal documents has slowed the completion; however, they are steadily making progress. Philipp addressed how other companies are looking for returns in the growth potential of Africa. He stated that the money is available for future projects, but the problem lies in putting together a project that is capable. Philipp first discussed projects in Kenya and Papua New Guinea, then he focused the remainder of the presentation on their popular project in Ethiopia.
Reykjavik Geothermal was able to start the first IPP project in Ethiopia, and it has been as he describes, a three year odyssey. He stated that the East African Rift is blessed with more than 10,000 MW potential of power. One of the challenges that he notes was working with government and convincing them to create projects at scale. Another challenge is the dollar availability of the country’s central banks. He listed the attractions of geothermal as a low waste and clean renewable resource that provides a base load of power for projects at scale. During Q&A, Philipp discussed in detail how they were able to get their 1,000 MW project in Ethiopia. He said the reassurance from the U.S. Government’s stamp of approval by making it the first Power project on the continent greatly helped their success in obtaining the PPAs. The geothermal project will be a springboard to more investment across the Great Lakes Region. He concluded by stating that since this was the first PPA for Ethiopia, they ensured that it was done well so that future projects will be able to run smoothly.
The meeting also served as the official launch event for CCA’s Power/Trade web portal. CCA’s Power/Trade Associate Morayor Essieh outlined the site’s features, such as a partnerships database and tenders portal, which are designed to connect businesses to transaction opportunities across every industry in Africa. The site will also include opportunities to provide feedback on investment barriers, insight to the often complex tender processes of multilateral institutions, and useful information on the Power and Trade facilitation. The full CCA Power/Trade web portal will go live in early 2015. In the meantime, several features of the site are open to CCA members and to the general public.
To search the Tenders Portal and to post a tender opportunity or project needing financing, please go to: http://www.africacncl.org/tenders-search
To view the Partnership Database or to add your company's profile to the database, please go to: http://www.africacncl.org/usabc-cca-directory
Presentations from the December 16 meeting are posted at http://goo.gl/xk7bnH
August 4, 2014
Alongside the August 2014 U.S.-Africa Leaders Summit, CCA hosted a series of events highlighting the considerable investment opportunities in Africa’s power sector. The feature event was the official Power luncheon held on August 4, which included a high-level panel discussion, a keynote by Elizabeth Littlefield, president and CEO of OPIC, and remarks by CCA Chairman Paul Hinks.
The panel, moderated by Andrew Herscowitz, coordinator of Power Africa and Trade Africa, emphasized the importance of speed, fuel diversification and regional integration in meeting Africa’s energy needs. The Honorable Davis Chirchir, cabinet secretary of the Ministry of Energy for the Republic of Kenya, and H.E. Professor Chinedu Nebo, minister of power for the Federal Republic of Nigeria, each addressed the ways that their countries are working to diversify sources of power generation to meet their countries’ rapidly expanding energy demands. Nigeria is exploring expanded investments in solar, while Kenya has been targeting Power Purchase Agreements (PPAs) for renewable sources, such as geothermal and wind, in order to meet the country’s goal to increase installed capacity to 5,000 MW by 2017. Ms. Littlefield emphasized the importance of development finance to catalyze private investment in diverse sources of power generation, remarking that sub-Saharan Africa accounts for more than 20 percent of the agency’s portfolio. OPIC’s investments include the Azura-Edo natural gas power plant in Nigeria and the landmark Lake Turkana Wind Power Project in northern Kenya.
Lorraine Bolsinger, president and CEO of GE Power & Water-Distributed Power, discussed the exciting ways that GE is working with local communities to generate reliable and efficient power using a variety of fuel sources at or near the point of use. Ms. Bolsinger said, “GE is helping customers throughout Africa use more of their own domestic energy resources, which in turn enhances the economic security of the region for future generations.” H.E. Adama Toungara, minister of petroleum and energy for Côte d’Ivoire said that his government is anxious to buy power from U.S. energy companies willing to produce in Cote d’Ivoire. The country currently serves as a leading example of regional integration in its cooperation with its neighbors through the West Africa Power Pool.
Joseph C. Brandt, president and CEO of the independent power producer ContourGlobal, stressed that speed of development is key to ensure that citizens receive access to electricity in a timely manner and to reduce corruption in the procurement process. He pointed to Brazil’s contract process as a model that is straightforward and encouraged countries to consider standardized PPAs, contracts, and debt agreements. Paul Hinks, chairman of CCA and CEO of Symbion Power, echoed the call for speed, saying, “We must all find ways to reduce timelines so that more generation capacity is available and more transmission and distribution lines are constructed.”
Power Working Group: Navigating the Power Sector in Ghana & Liberia
August 1, 2014
On August 1, CCA’s Power Working Group had the pleasure to host ministerial speakers who discussed the power sectors of Ghana and Liberia, highlighting opportunities and challenges for private sector participation. Additionally, executives from the Millennium Challenge Corporation discussed potential opportunities in relation to their upcoming compacts. Guest speakers included: guest speakers: Hon Emmanuel Armah-Kofi Buah, Minister of Energy and Petroleum, Ghana, Hon. Patrick Sendolo, Minister of Lands, Mines & Energy, Liberia, Kamran Khan, Vice President, Department of Compact Operations, Millennium Challenge Corporation, Evan Freund, Country Team Lead, Liberia, Millennium Challenge Corporation, and Deidra Fair James, Country Team Lead, Ghana, Millennium Challenge Corporation.
Minister Sendolo opened the meeting by addressing the effects of the civil war on the already underdeveloped power sector in Liberia. Due to the conflict, Liberia was left with a destroyed power infrastructure and a public electricity access rate of 0.58 percent, which has gravely impacted Liberia’s economic development. The country has been working to rehabilitate the Mount Coffee Hydropower Plant, which is expected to provide 64 MW once online in 2015, and the ministry is looking to develop distribution and transmission in the country. With a high number of illegal power connections and the electricity tariff at $.57 per kilowatt-hour, the ministry is also working with private sector companies to improve the Liberian Electricity Corporation.
In the second part of the working group, The Millennium Challenge Corporation (MCC) Vice President of Compact Operations, Kamran Khan reviewed MCC’s work with Ghana, Tanzania and Liberia. Mr. Khan’s colleagues – Deidra Fair James, country team leader for Ghana, and Evan Freund, country team leader for Liberia – reviewed MCC’s compacts with Ghana and Liberia, each of which will focus on the energy sector. The Ghana compact has been signed and will revitalize the Electricity Company of Ghana and Northern Electricity Distribution Company. The Liberia Compact is currently in development, and MCC is seeking private sector input in the compact.
Power Working Group: Navigating the Power Sector in Ethiopia: A special session of the U.S.-Ethiopia Investment Summit
July 30, 2014
On July 30, 2014, CCA’s Power Working Group presented a special meeting during the U.S.-Ethiopia Investment Summit in Houston, TX. The featured speakers of the event included H.E. Ato Alemayehu Tegenu, Minister of Water and Energy, Ethiopia, and Engr. Azeb Asnake, CEO, Ethiopian Electric Power. The speakers discussed the power sector in Ethiopia, highlighting opportunities and challenges for private sector participation. The session was moderated by Anthony Carroll, vice president of Manchester Trade and featured other speakers including: Ambassador Girma Birru; Michael Philipp, chairman of Reykjavik Geothermal; and Kwame Parker, head of power and infrastructure, East Africa for Standard Bank.
Mr. Parker reviewed Standard Bank’s work as the largest African banking group by assets and earnings. The Bank currently operates in 32 countries around the world and has plans to expand into Ethiopia. Mr. Philipp discussed the work his company is doing with the 1,000 MW Corbetti geothermal plant, which is the first independent power project in Ethiopia’s history.
All speakers emphasized the excellent opportunities available in Ethiopia. The CCA Power Working Group was formed to expose potential investors to the realities of energy investment on the continent, as well as highlight the exciting opportunities and growth potential of the market. These meetings bring together high-level African and U.S. executives and government officials. They also provide a venue to connect U.S. private sector investors with other stakeholders in the sub-Saharan African energy sector in order to facilitate networking, strategic partnerships and deal creation.
Power Working Group: Navigating the Power Sector in Liberia & Nigeria
May 29, 2014
On May 29th, The Corporate Council on Africa and Greenburg Traurig hosted a Nigerian delegation consisting of the Nigerian Ambassador to the United States, Adebowale Ibidapo Adefuye; Chairman of the Presidential Task Force for Power, Beks Dagogo-Jack; and Chief of Staff to the Minister of Power, Professor Chidi Onyia. During the forum, a number of topics were covered regarding the current state and future potential of the Nigerian power sector, particularly noting the important role of private sector investment. Ambassador Adefuye briefly began by highlighting the promising composition of the Nigerian population and market, with the majority under the age of 30. He also stressed the powerful impact that sustainable and reliable power could have on the future economic success of this population.
Chairman Dagogo-Jack continued by presenting the strategic plans and initiatives that the country has undertaken in order to ensure an increased national accessibility to electricity. The initial step of this process was the liberalization and unbundling of the previously state-owned power company, which was responsible for the generation, transmission and distribution of electricity throughout the country. This arrangement proved to be inefficient and costly. Denationalization directly resulted in the transfer of 11 distribution and 6 generation plants to private ownership. The next integral phase of development, according to Dagogo-Jack, is the expansion of the national transmission network of 20 GW, which is still underway.
The ongoing improvement of power in Nigeria will require a large amount of capital, which the country is hoping to acquire through foreign investment. Even with the growing number of domestic ownership within the relatively infant industry, external support is still a pivotal part of addressing what have become overwhelming demands and necessities. It has been projected that roughly $18 billion will be needed in order to complete objectives and plans slated to run through 2020. The breakdown is comprised of about $4.5 billion that will be allocated for the construction of pipeline infrastructure, $3 billion for the enhancement of generation capacity, and $1.5 billion for transmission, with the rest being utilized for expected maintenance. Another vital component of the overall plan that has been adopted by the government is increased emphasis on capacity building through necessary industry training and education. Dagogo-Jack stated that at the current rate, there will be a technical staff shortage of about 18,000 workers if efforts are not made to build local knowledge. However, through the successful projects of the Edo IPP, churning out 1,500MW, and GE’s Emerald project that has created 2,300 hundred jobs, the Chairman projected that it is only a matter of time until Nigeria starts producing the power of which it is capable.
The discussion ended with Professor Onyia speaking on how the federal government intends on participating in the market through the funding of pilot projects, implementation of rural electrification, and strengthened security of pipelines. He also stated that the removal of government interference from the business process in Nigeria has proven to be a driving force behind the growing opportunities for private investors of the industry, which should be explored immediately.
The group was honored to have Matthew McGuire of the United States Department of Commerce drop by the brief participants on takeaways from Secretary Penny Pritzker’s recent trip to Africa, mentioning the immense potential for private sector partnership with African nations looking to develop their power capacity. Mr. McGuire also reasserted that this is the best time to enter the market for foreign businesses committed to long term success on the continent. The session concluded with the speakers answering questions from attendees, on topics such as how cultural notions entitling citizens to free power can be changed and how private sector providers of electricity services can enforce payment by consumers.
For more information and access to the presentations, please visit: http://goo.gl/QQknsQ
Industry Briefing: Oil & Gas Opportunities in Ghana at the Offshore Technology Conference in Houston, Texas
May 6, 2014
On May 6, the CCA Energy Working Group was honored to co-host an industry briefing on Oil & Gas Opportunities in Ghana at the Offshore Technology Conference in Houston, Texas. The meeting featured: the Vice President of Ghana, His Excellency P.K. Amissah Arthur; the Minister of Energy, the Honorable Emmanuel Armah-Kofi Buah; the U.S. Ambassador to Ghana, the Honorable Gene Cretz; and the CEO for the Ghana National Petroleum Corporation (GNPC)Alexander Kofi-Mensah Mould; as well as private sector speakers from Kosmos Energy and General Electric.
In his introductory remarks, Ambassador Cretz outlined the importance of local partners in Ghana’s commercial landscape, saying “relationships are the local currency.” He also stated that Ghana’s medium-term outlook is strong; however, he emphasized that the government must lower the deficit and address local content regulations in oil and gas in order to achieve the country’s potential as a regional leader. Along with Ambassador Cretz, each speaker praised the fundamental role that CCA has played in facilitating business relationships between the U.S. and Africa.
Next, Vice President Arthur addressed concerns about transaction speed and local content regulations. He said that Ghanaians are deliberate and careful in an effort to provide the safest and most transparent business environment as possible. The Vice President also announced that gas and local content are high on the agenda for the legislative calendar, as disruptions in power have limited economic growth and natural gas is seen as enabler for complementary agencies. Minister Buah also stated that it is time to review shortcomings in local content laws in order to encourage investment, although he pointed out that several U.S. companies, including CCA members Anadarko, Hess, Kosmos, Shell, and General Electric are already engaged in Ghana.
Mr. Mould echoed Ambassador Cretz’s sentiment that in order to do business in Ghana, companies need to establish in the country and make real partnerships. He said that in the next two to five years, Ghana will spend $25 billion developing new blocks, and they would like to see U.S. companies partnering with local groups on these developments. One project he highlighted was the Voltaian Basin, which GNPC is working to fast-track in an effort to solve the country’s power woes. Over the next six months, GNPC will be conducting geological assessments and exploring options to invite investors to partner in the venture.
A private sector panel closed out the forum, with executives from Kosmos Energy and General Electric both expressing their excitement over their business ventures in Ghana. They also encouraged the government to continue refinements to governance, regulations, and management of petroleum sector to help increase FDI and meet the country’s goals on electricity supply.
Power Working Group: Navigating the Power Sector in Kenya & Tanzania
March 26, 2014
The second meeting of the Power Working Group explored the power sectors of Kenya and Tanzania. The meeting was held at the offices of The Corporate Council on Africa’s member company Greenberg Traurig LLP, which sponsored the event.
Kenya’s Ambassador Jean Kamau kicked off the event, giving an overview of Kenya’s strategic energy plan and vision for universal access to electricity by 2030. To achieve this goal, she highlighted several key initiatives, including diversifying away from hydro power to geothermal and other natural resources, building LNG capabilities, and increasing incentives to encourage private sector participation in energy development, including a robust feed-in tariff structure and standardized Power Purchase Agreement. She also discussed the strong demand for solar photovoltaic panels in Kenya and highlighted the strategic opportunity to invest in manufacturing their components.
Deputy Head of Mission Nairimas Ole-Sein then presented two key documents on Kenya’s plans to dramatically increase electrification: the “5000 MW+ by 2016” document, which explains the country’s plan to add at least 5000 MW to the grid in the next two years, and an expression of interest for new coal development projects in Kenya. Both speakers highlighted Kenya’s strong commitment to achieving nationwide electrification and the desire of the government to work in tandem with the private sector.
Next, Tanzanian Ambassador Liberata Mulamula introduced Tanzania as an enthusiastic partner with the Corporate Council on Africa. Eng. Rwabangi Luteganya, manager of investment for Tanzania’s public utility, TANESCO, then presented a thorough overview of Tanzania’s power sector, including important stakeholders and investment opportunities. Tanzania’s priority, he said, is to utilize available indigenous resources for least cost, sustainable power generation. To achieve this, he highlighted the Big Results Now program, which aims to dramatically improve generation, transmission and distribution capabilities. He also spoke of new initiatives to improve revenue collection, which will aid Tanzania’s partnerships with Independent Power Producers.
Luteganya also discussed Tanzania’s plans for new plant and transmission construction, going over individual opportunities for private sector investment in each. To round out the Tanzania discussion, Jonathan Saiger, senior director of Energy for the Millennium Challenge Corporation (MCC), spoke about MCC’s investment in Tanzania’s energy sector through its first compact (2009-2014) and a second compact currently under development. He noted that the details of the second compact are still in flux, although it is likely to focus on utility reform and restructuring, new connections through on and off-grid expansion, and integrating electricity into the agricultural value chain. Discussing challenges, he noted that the sector is in transition, but there is now a renewed focus on policy and long term planning, which is beneficial for improving multi-government and private sector coordination. A Question and Answer period followed, centering on TANESCO reform, rural electrification and integrating management training and capacity building into USG programs.
The event concluded with a U.S. Government panel, with high-level representation from many of the agencies partnering to promote power in Africa. Panelists included:
Enoh Ebong, General Counsel at the U.S. Trade and Development Agency
Earl Gast, Assistant Administrator for Africa at the U.S. Agency for International Development
Robert F. Ichord Jr., Deputy Assistant Secretary for Energy Resources at the U.S. Department of State
Kamran Khan, Vice President of Compact Operations at the Millennium Challenge Corporation
Elizabeth Littlefield, President and CEO of the Overseas Private Investment Corporation
Glen Sweetnam, Director of African and Middle Eastern Affairs at the U.S. Department of Energy
Benjamin Todd, Business Development Officer for Africa at the Export-Import Bank of the U.S.
Power Working Group: Power Opportunities
November 20, 2013
At CCA's Power Working Group, Paul Hinks, CEO of Symbion Power and The Corporate Council on Africa’s Chairman, and Wale Shonibare, Managing Director of Investment Banking at UBA Capital Plc, discussed both the promise of the Obama Administration’s initiatives and the logistics of investing in Africa through this incentive structure.
Mr. Hinks gave insight into how energy projects are vetted through U.S. agencies and offered recommendations on how to structure a company’s first entrance into the Africa energy market. Mr. Shonibare discussed Nigeria’s power sector and his bank’s role in financing new energy projects, providing an example of how U.S. companies can work with local institutions for fast-track financing to kick-start their USG-sponsored projects.
A robust Question and Answer session followed, discussing African government coordination to support energy incoming investments, the role of international financial institutions, and logistical strategies for infrastructure investment on the continent.